China’s central and local officials have a message for the all-important property market: don’t expect the cavalry.

During these rocky times for the sector, “stability” is en vogue.

On January 21, President Xi Jinping told provincial heads to enact a “long-term mechanism” to ensure the healthy development of the property market. Since mid-January, provincial leaders have moved in line to pledge “stability” in their respective local markets this year.

That is meant to put off expectations that cities will ease policy curbs put in place to cool down soaring home prices, some analysts say. Property curbs include such things as caps on home prices and restrictions on re-selling.

Since mid-January, at least six provinces have repeated the line “keep housing price stable, land price stable and market outlook stable” in their annual provincial legislature gatherings, a prelude to the national meeting in March. The provinces include Fujian, Guangdong, Hunan, Henan and Hubei, and the central administrative municipality of Beijing. No cities have eased curbs since Beijing became the fourth city to do so on January 9.

“After a few Chinese cities loosened their existing property curbs without intervention from upper authorities in December, there was rising expectation that more cities would follow. As ‘outlook’ holds the key to the property market, they may feel there is need to cool the sentiment a bit,” said Yan Yuejin, research director of the E-house China R&D Institute.

On January 9, Haikou, the provincial city of tropical island Hainan, even stepped up its curbs after suspicion arose that it was loosening curbs covertly.

The Chinese Academy of Social Sciences, an official think tank, suggested in a recent report that the central government wants to keep home purchase restrictions and down-payment requirements – two major curb tools – in place, in an effort to stem speculation.

“The tendency to loosen curbs on speculation after a small correction of the property market, and even to stimulate home purchases, should be avoided,” the academy said.

Prices of China’s new homes grew at the in December, according to Bloomberg’s calculation of data released by the National Bureau of Statistics. While price growth kept slowing in lower-tier cities, those in biggest cities staged a rebound.

For the whole of 2018, despite a slowdown in sales and a souring of sentiment in the second half, China’s real estate investment still grew 9.5 per cent while sales value rose 12.2 per cent, from a high base of 2017.

Housing – and its related sectors – are critical to China’s economy, accounting for about one-third of its GDP. Meanwhile, home ownership is a huge part of the average Chinese person’s wealth, and local governments, which own the land, rely heavily on land sales to fund their budgets. All that underscores why the central government is keen to keep things stable, neither allowing a big plunge or big run up in home prices.

Danielle Wang, a property analyst with DBS Vickers, said the market is far from deteriorating to an extent that warrants a big policy reversal to a “stimulating mode”.

“The problem is not that the central government is seesawing on its policy tune, but rather it is that the market had been overly optimistic [about the easing] and now is a bit disappointed,” she said.

For now, local governments may shy away from any policy that looks “too supportive”, such as easing of non-locals purchasing homes in areas or reduction of minimum down-payments, and instead focus on fine tuning such things as price caps and re-sale restrictions.

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